The Housing Bill: just for starters

Originally posted on January 6 on Inside Edge 2, my blog for Inside Housing

MPs staggered bleary eyed from the House of Commons at 2am last night without even getting to the most contentious parts of the Housing and Planning Bill.

Despite a series of obituaries for council housing and a ‘Kill the Bill’ protest outside, issues such as forced high-value sales, Pay to Stay and the voluntary Right to Buy will only be considered on day two of the report stage debate (set for next Tuesday, January 12).

Last night’s five-hour debate included starter homes, the regulation of housing associations, rogue landlords and the planning system. Opposition MPs complained that 65 pages of new clauses and amendments had been added at the last minute to a Bill that was only 145 pages long.

I blogged back in October that this a Bill written on the back of a fag packet and last night only confirmed that impression. The Bill also leaves a series of crucial decisions to be made by ministers by regulation later.

Nothing sums this up more than new clause 31 on planning obligations and affordable housing. This adds starter homes selling for up to £450,000 to the existing definition of affordable housing: homes for people whose needs are not adequately served by the market. However, it also adds that:

‘The Secretary of State may by regulations amend this section so as to modify the definition of “affordable housing”.’

In essence ‘affordable’ will now mean whatever Greg Clark says it means. If the government fails to generate enough affordable housing according to its current working definition (80% of the sale price or 80% of the market rent), it can simply get out the fag packet and draw up a new one.

On starter homes, the government saw off an attempt by Conservative backbenchers to prevent jerry building (one obvious way to get to the 20% discount). Maria Miller seemed to get nowhere with her call for all starter homes to be individually inspected for quality (only a sample of new homes are at the moment) but did get a commitment to consider giving buyers access to inspection reports.

A series of Labour and one Lib Dem amendments on starter homes were either withdrawn or voted down (the Bill is the first to be covered English Votes for English Laws so there is a big Conservative majority). These included:

• Preserving the 20% discount in perpertuity.
• Ensuring they are affordable on local incomes
• Excluding buy to let property from the definition of a starter homes
• Reserving a proportion for local people
• Restricting starter homes to exceptions sites (the original policy before the target was doubled and section 106 changes proposed).
• Making the government consult local authorities if it wants to raise the price cap beyond £450,000 (£250,000 out of London).

Labour’s Clive Betts summed up the case for the first:

‘If it is such a good idea to help people on to the housing ladder, why do we not help the next group of people on to it by ensuring that the discount, or assistance, continues in perpetuity?’

And he also challenged Conservative members who claimed the starter homes would be additional, rather than merely displacing other affordable homes that would have been delivered through section 106:

‘If no more homes are built than would have been built under section 106 but extra money goes into house purchasing, as is demanded by this starter home measure, the amount of money available to purchase homes will increase and the supply of homes will not. There is only one conclusion to be reached: house prices could eventually be driven up further.’

Housing minister Brandon Lewis rejected anything that would water down the definition of a starter home or put restrictions on buyers:

‘If someone can never realise more than 80% of the value of their property, they lose the ability to move upwards in the housing market. This risks stagnation, rather than mobility. I want to incentivise young people and families to move onwards and upwards, and our model will enable families to do just that.’

The series of amendments promised before Christmas on social housing regulation were also voted through. The changes on disposals and consents and the appointment of officers and managers are of course designed to get the ONS to change its classification of housing associations back to private sector.

Debate on this was minimal, though there was an interesting gloss from junior minister Marcus Jones in the light of the government’s priorities for the rest of the Bill:

‘The amendments also give housing associations greater freedom as to how they manage their finances by abolishing the disposal proceeds fund. In future, the historical grant in a property that is sold will be required to be recycled to ensure that grant continues to be spent as it was intended. Housing associations will be able to use this money in the most efficient way possible and reinvest in building more houses and helping more of their tenants into home ownership.’

As the debate reached midnight, Labour’s Roberta Blackman-Woods was generally supportive but asked whether the government had discussed them with the ONS and what it intended to do if they are not enough to trigger classification. She did not get any answers.

Last night’s debate also covered new clauses and amendments to two other key parts of the Bill covering the private rented sector and planning, for which space allows me only a few brief highlights.

On private renting, the government had originally proposed a maximum fine of just £5,000 on rogue landlords but it has listened to concerns that this is too low and has now increased it to £30,000.

On planning, there was controversy over a new clause to allow the outsourcing of the processing of planning applications, the compulsion on local authorities to promote starter homes and the extension of ‘permission in principle’. Needless to say, the government got its way.

And then we were back with where I started and that definition of ‘affordable’. As Clive Betts put it:

‘In other words, “affordable housing” is no longer what people can afford, but what the Government say people can afford. If the Government do not find themselves producing enough affordable housing under the current definition, they do not have to build more houses; they simply have to change the definition so that more houses are covered by it. The Minister is getting into a bit of a fantasy world, but unfortunately the Government are operating in the real world.’

Fantasy will meet reality again next Tuesday when MPs debate new clauses and amendments to the rest of the Bill. At stake: the future of social housing in England. See my post The Housing Bill: from bad to worse for more on that.